Near-term market recovery unlikely: Argo

INVESTMENT firm Argo Investments says global equity markets are unlikely to show any meaningful recovery in the short term.

But in the long term, The Australian market represented relatively good value.

Argo on Monday posted an annual net profit for the 2011/12 financial year of $167.3 million, down 2.8 per cent on the prior year.

The bottom line received a $13.7 million boost from one-off transactions, including dividends from a demerger and share buy-backs.

"The economies of many developed countries have continued to slow, and the European debt crisis has regained prominence," Argo chief executive Jason Beddow said in a statement.

"The impact of tough austerity measures in response to unsustainable sovereign debt levels in Europe is pushing many countries into recession, and the region is likely to remain a potential source of adverse shocks for some time to come."

Mr Beddow said, however, that Australia was well placed to weather future shocks given its relative strength compared to other western economies.

"With this background in mind, we remain of the view that for a long-term investor, the Australian equity market is relatively good value."

Argo said that as a result of a general decline in investment values, the total return from the company's portfolio in the 2012 financial year was a negative 5.7 per cent, compared to a fall in the Australian market of seven per cent.

Argo said its profit, after allowing for one-off transactions, reflected an increase in dividends and distributions received from some of the companies and trusts in its investment portfolio.

This was partly offset by reduced interest income, which reflected lower interest rates on Argo's cash deposits.Argo declared a fully-franked final dividend of 13 cents per share.